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Google ponies up $4.6bn for wireless spectrum

If the FCC obeys its demands

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Google's riches are exceeded only by its cheek. When the Federal Communications Commission auctions off the coveted 700-MHz wireless spectrum, the search giant has said it will lay down a bid of $4.6bn - provided the auction is handled exactly the way Google wants it handled.

Recently vacated by television channels making the switch to digital transmission, the 700-MHz band goes up for auction sometime early next year, and Google has been calling for the FCC to require "open-access" to the spectrum, arguing that consumers and businesses should have the freedom to use wireless networks however they choose - without answering to big-name carriers like AT&T and Verizon. It's been rumored that Google would bid for the band if the FCC opts for open-access, but this is the first time the Mountain View outfit has publicly admitted as much.

"For several years now, many Googlers have been working to identify the obstacles that prevent the Internet from being available to everyone on the planet," wrote Chris Sacca, Google's head of special initiatives, on the company's official blog. "Today, we're putting consumers' interests first, and putting our money where our principles are - to the tune of $4.6 billion."

The catch is that the company won't bid unless the FCC adopts all the open-access requirements it recommended with an electronic filing early last week. Anyone who wins a 700-MHz license, Google says, should be required to provide open access to consumers as well as third-party companies: Consumers should have the freedom to attach any mobile device to the network and use any application (provided they don't harm the network); resellers should be able to acquire wireless bandwidth from 700-MHz licensees on a wholesale basis, so that they too can offer service to consumers; and ISPs should have the power to plug into the network at any "feasible" point.

When contacted, the FCC declined to comment, but it doesn't seem that the draft rules recently laid down by chairman Kevin Martin go quite as far as Google would like. Judging from an earlier conversation with an FCC official, the draft rules fulfill Google's requirements where consumers are concerned - but not necessarily third-party companies. Plus, the draft rules apply only to a portion of the band being auctioned off (22MHz out of 60MHz in total).

Martin's draft rules have yet to be approved by the other FCC commissioners, and current wireless carriers like Verizon have vehemently opposed open-access, hoping to retain the current set-up. You know, the one where they have complete control over the network.

"In order to apply with a variety of [FCC] rules - including both technical rules and public interest obligations - wireless carriers must be able to manage all aspects of their network," reads a recent FCC filing submitted on behalf of Verizon (PDF).

Verizon has even said that open access would curb innovation. "The one-size-fits-all mentality that characterizes open access regimes for the wireless industry would begin the process of stifling innovation and creativity in our industry," the company's general counsel recently said at a recent congressional hearing.

Tell us another one.

Others have supported Google open-access requirements, including Skype and two public advocacy groups, but it's Google that has the deep pockets. The $4.6bn its prepared to bid is the reserve price set by the FCC. "With any concerns about revenue to the U.S. Treasury being satisfied, we hope the FCC can return its attention to adopting openness principles for the benefit of consumers," said The Official Google Blog.®